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Lemer & Company successful in Supreme Court of Canada ruling allowing Business Practices and Consumer Protection Act claim to proceed

Consumers in British Columbia will be interested in a recent Supreme Court of Canada decision in Seidel v. Telus, in which Lemer and Company represented the plaintiffs. The appeal dealt with an increasingly common strategy used by corporations in an attempt to avoid class actions arising from shoddy goods and services or improper charges under consumer contracts: an arbitration agreement. The arbitration clause is placed in the small print of consumer agreements or it may be part of the agreement to use a company’s website – consumers hardly ever read the small print or understand the implications. These clauses provide that any dispute will be heard by an arbitrator and that the consumer will waive their right to participate in a class action. The problem for the consumer is that an arbitration is expensive and would require a lawyer’s help. By himself, a consumer would have a small claim and could not pay a lawyer and the cost of an arbitrator. A class action allows consumers to band together and hire lawyers on a contingency or percentage fee basis because the collective value of all of the consumers’ claims would be sufficient for the lawyer to take on the risk. The companies know that forcing consumers to arbitrate will mean the claims will never get to court. In Seidel the Supreme Court of Canada accepted our argument that provisions of the British Columbia Business Practices and Consumer Protection Act override an arbitration clause and the action under that consumer protection statute was allowed to proceed.

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